Store owners fight liquor law changes
GOSHEN — More than a dozen owners of independent Northwest Corner liquor stores gathered at Goshen Wine & Spirits on Friday, Feb. 24, for a rally, hosted by state Sen. Andrew Roraback (R-30) against Democratic Gov. Dannel P. Malloy’s proposed changes to state liquor laws.In his opening remarks, Roraback said, “If you like what Home Depot has done for our local hardware stores, if you like what CVS has done for our community drug stores, you are going to love what the governor’s proposal does for our neighborhood package stores.”He explained the proposed change in the liquor laws by saying, “The state of Connecticut has long had a set of rules about how liquor is sold and distributed. The governor is intent on changing the rules — to the disadvantage of small businesses in our state.”Opponents of the proposed changes say the governor is saying the changes would benefit consumers through lower liquor prices and seven-day-a-week sales. Northwest Corner liquor store owners say that is a false characterization of the proposed changes. One liquor store owner said the longer opening hours and Sunday sales are just a red herring. Ira Smith, owner of Kent Wine and Spirit, said, “The proposed act 5021 is entitled ‘An act to reduce the cost of beverage alcohol to the consumer.’” All of the assembled liquor store owners and politicians agreed that while that is the title of the proposed legislation, that is not the main purpose of the proposal.The three areas of the liquor business the proposed legislation addresses are: retail liquor selling hours, how liquor is priced at the wholesale level and how liquor store licenses are sold.Hours, prices favor chains• The proposed legislation would permit retail liquor stores to remain open until 10 p.m., instead of the current 8 p.m., and to be open on Sundays. There are also proposed extensions of opening hours for establishments selling liquor by the glass, such as bars.• Under current law every retailer in the state pays wholesalers the same price. For example, a small package store may purchase one case of a particular liquor for $120 ($10 per bottle). A large liquor store or chain store that buys 100 cases of the same product each month pays its wholesalers the exact same price. If the proposed legislation becomes law, wholesalers will be allowed to offer quantity purchases. Most likely, the small independent retailer will still pay his wholesaler $10 per bottle while the large store or chain of stores will most likely receive quantity discounts. The chain purchasing 100 cases per month may have to pay only $7.50 or $8 per bottle of the same item.That will allow the larger merchants and chains to either sell that bottle for a lower price to consumers or enjoy a higher operating profit. Most likely, it will be a combination of both.Independent liquor store owners say this will effectively put many of them out of business. A salesman for a liquor wholesaler, who asked not to be named, said earlier this month in an interview, “If this legislation passes, within one year 30 percent of Connecticut’s independent liquor stores will be out of business.”Roraback said, “This proposal probably has the greatest likelihood of harming small business in Connecticut [of all the bills] in this legislative session.”Medallion system The third part of the proposed legislation concerns how liquor stores are sold/established. Under current law there is one retail liquor license allowed per each 2,500 population in a town. Some of the towns in the Northwest Corner have, by law, only one or two retail liquor stores.Bill Fore of New Preston Wine and Spirits said, “As it is right now, if you buy my store you would have to keep that license in the town where it exists. So, if all of the licenses allowable in a community are already in play, the only way for you to go into business in a community is to buy an existing business.”The proposed law would establish a medallion system for liquor license application. If the proposed laws are enacted by the Legislature, each existing liquor store owner in Connecticut will be granted a medallion from the state. That medallion would be a saleable conveyance of the privilege of owning a liquor store license. Only medallion owners would be permitted to apply for retail store licenses. There is a similar medallion system for taxicabs in New York City.Fore said, “If you want to go into business [owning a liquor store] you will need a medallion in order to apply for a new license. So, I could close my license and sell you my medallion, and then you would have the privilege of applying for a new license.”The medallion system would allow someone to purchase a medallion anywhere in the state and then take it to anyplace else in the state where they want to put a store, regardless of the population of that town or the number of licenses already there.“What this really means to us as business owners,” Fore said, “is that each of us owns an asset, a business. Our businesses are valued based on two fundamental things: our volume of sales and the exclusivity of our license [as limited by town population]. “With the medallion system, that exclusivity goes away; the value of my business asset is eroded. This is tantamount to a pervasive destruction of privately held value, which is simply wrong. “It’s as if you lived in a country where the currency had been devalued and the dollars you held yesterday turned out to be pennies in the morning.”The crux of the issueRichard Bramley, owner of the Cornwall Package Store said, “I’ve been here for more than 30 years. The proposed complete legislative package, and it really is a whole package, is not just about the Sunday sales. This package hits hard at one of the core businesses in a small town. The legislation will slant the playing field toward large corporate entities. This is really the crux of the issue.”“Economic impact analyses have concluded over and over again that local merchants generate substantially greater economic impact for their towns than chain retailers,”he said. “For every $100 dollars spent with a local merchant, $43 remains in the local economy, whereas when that same $100 is spent at a non-local chain, only $13 remains in the local economy.”‘At the expense of many’State Rep. Clark Chapin (R-67) said, “This piece of legislation is going to advantage someone. There is no other reason for this bill to be before the Legislature. There will be some small group of people who will reap the benefits of this legislation at the expense of many.”The governor scheduled a hearing in Hartford on Feb. 28 (after The Lakeville Journal’s press time) on the proposed legislative change.